Progress on proposed Trade Secrets Directive

On the 26th May 2014, the Council of the EU (“Council”) released its opinion on the Proposed Trade Secrets Directive (the “Proposed Directive”). The Council suggested certain amendments to the text of the Proposed Directive.

The amendments/clarifications that emerge as prominent among others are:

Member States have agreed on the need to explicitly state in the Proposed Directive that this directive is a minimum harmonisation directive and accordingly national laws may stipulate provisions that are more far-reaching than it. Additionally, whereas previously Article 3 of the Proposed Directive made reference to criminal acts such as theft, bribery and deception, such references have been removed.

Of key note to employers and employees is that a more favourable regime towards employees has been adopted in terms of damages. This comes about through the introduction of an additional paragraph under Article 13. Through this inclusion, Member States may restrict the liability of employees for damages caused to their employers for the unlawful acquisition, use or disclosure of a trade secret belonging to the employer when an employee acts without intent.

Amendments to the adoption of injunctions and corrective measures were also introduced through changes to Articles 10(2) and 12(1) of the Proposed Directive. Through these amendments, in determining whether to issue an injunction or adopt a corrective measure, national judicial authorities are to take into account the specific circumstances of the case” (Art. 10(2)). This assessment would include factors such as the value of the trade secret, the measures taken to protect the trade secret, or other specific features of the trade secret, as well as the conduct of the infringer in acquiring, using or disclosing of the trade secret, the impact of the unlawful use or disclosure of the trade secret, the legitimate interests of the parties and the impact which the granting or rejection of the measures could have on the parties, the legitimate interests of third parties, the public interest and the safeguard of fundamental rights only “where appropriate”.

Article 4 which created a framework for the lawful acquisition, use and disclosure of trade secrets and exceptions thereof has also been widened. Though the introduction of a new Article 4(1a), disclosure, use or acquisition of a trade secret will not be unlawful when that such acquisition, use or disclosure is required or allowed by Union or national law.

The Proposed Directive was published by the European Commission on in November 2013 – more information on this Proposed Directive can be found here and the full text of the Proposed Directive as amended by the Council’s Opinion can be found here.